Watanabe brothers infuse Rs.400mn into Asia Capital
Become 2nd and 3rd largest shareholders
Group net loss for 9-months at Rs.444mn
Accumulated losses at Rs.888mn
Group borrowing at Rs.2.1bn
Net asset value per share at Rs.2.67
Asia Capital PLC announced yesterday the infusion of Rs.400 million into the group by two Japanese investors, brothers Yoshimichi Watanabe and Eiji Watanabe, through a private placement.
To this effect, the group has issued 21.33 million fresh shares to both individuals, giving them a 16.3 percent stake in the company. This makes Watanabe brothers the second and third largest shareholders of Asia Capital PLC.
In a stock exchange filing on March 27, Asia Capital PLC said it had resolved to issue 21.3 million shares to the Watanabe brothers at price of Rs.18 per share, by way of a private placement, subject to Colombo Stock Exchange and shareholder approval.
Asia capital group reported a net loss of Rs.444.8 million for the nine-months ended December 31, 2013, up from a net loss of Rs.386.4 million in the same period of the previous year.
As at December 31, according to Asia Capital group’s balance sheet, group borrowing remained at Rs.2.1 billion while the accumulated loss stood at Rs.888.3 million.
Basic loss per share further deteriorated to Rs.4.04 from Rs.3.51. The book value per share also declined significantly to Rs.2.67 from Rs.7.06.
This fresh capital infusion is expected to strengthen the group’s balance sheet as it is now able to clear out a significant portion of its debt. The move also changes the shareholding of the group to be in line with Colombo Stock Exchange (CSE) regulations.
Speaking on behalf of both brothers about the investment into Asia Capital, Yoshimichi Watanabe said, “Sri Lanka is a beautiful country with a large pool of natu- ral resources and furthermore the people are friendly and trustworthy.
“These are very important traits for us and we have worked closely with Asia Capital for the past two years. So, we are convinced we have found the right partner for our investment plans. Sri Lanka is one of the few countries in Asia which still has a huge growth potential and we look forward to bring in more Japanese investors to Sri Lanka.”
Expressing his enthusiasm over the new investment, Asia Capital Group CEO/ Director Stefan Abeyesinhe, said, “We are very excited to have the Watanabe brothers joining us to become shareholders in our company. This is a testament to the faith foreign investors have in Sri Lanka and Asia Capital and the obvious potential for growth that they see.
“Sri Lanka has shown exceptional growth figures during the past four years and the CSE has seen strong growth in net foreign inflow over the past two years. This capital infusion will enhance our ability to capitalize on that growth.”
Over the past two years, Asia Capital has seen several Japanese investors making capital infusions into the company through private equity. The company currently has several Japanese individuals and companies investing in its subsidiar- ies, especially in the leisure sector.
Watanabe brothers’ shareholding in the parent company is expected to further strengthen the confidence in the Group among other Japanese investors. This is expected to greatly assist Asia Capital PLC in securing more capital for multiple projects in Sri Lanka.
Asia Capital PLC is the largest investment bank in Sri Lanka to be listed on the Colombo Stock Exchange. As a group, Asia Capital has identified strong potential in the property, leisure and real estate sectors and is changing direction to focus on these avenues of growth. ACAP plans to expand its leisure and property sectors over the next few years and to increase its leisure portfolio substantially.